Funding redirection could bring high-speed access to new areas of the country

The
Universal Services Fund (USF) was an initiative put in place by former U.S.
President Bill Clinton's Federal Communication Commission in 1997. The
USF takes a large cut out of consumer phone bills -- approximately 15 percent
out of a long-distance bill, for example -- and redirects that money to funding
landline telephone service to low-income rural areas, and providing broadband
at public institutions.

He proposed the change during a speech [PDF]
at the Information Technology and Innovation Foundation. He stated:

In the 21st century, high-speed Internet, not
telephone, is our essential communications platform, and Americans are using
wired and wireless networks to access it. But while the world has changed
around it, USF -- in too many ways -- has stood still, and even moved
backwards.

Currently the landline fund eats up $4.3B USD a year, while the broadband fund
only gets a chunk of the remaining money. Chairman Genachowski suggests a
gradual fadeout of the telephone funding, transitioning that money to a
new broadband deployment and support fund designed to push broadband into
rural areas.

The new fund, formally titled the Connect America Fund, would aim to cover
24 million Americans with broadband. Chairman Genachoski complains
that the USF is becoming outdated and needs the changes. He states,
"The fund pays almost $2,000 per month -- more than $20,000 a year -- for
some households to have phone service. And in many places, the existing system
funds four or more phone companies to serve the same area."

The speech came with the filing of a "Notice For Proposed Rule-Making"
(NFPRM). This is the FCC's way of giving the public chance to comment.

Wireless service providers like Verizon and rural broadband providers have
expressed enthusiasm about the shift. Thus far rural landline operators
have kept quiet, but they're unlikely to appreciate the measure.